Starting off 2021 by revising your business plan might well be the best move to ensure success in the months ahead. By John Burfitt
If your business plan is something that lives in a bottom drawer and has not seen the light of day in years, then now might be a good time to reboot not only the way you consider it, but also the plan itself.
That’s the consensus of a number of analysts who state that after the upheavals of the COVID pandemic through 2020, revising a business plan first thing in the new year to suit the changing times could set a restaurant business on the right road for 2021.
“It’s so important to have a plan that is in place and can be executed as the year ahead unfolds,” Howard Tinker, restaurant marketing coach and author of More Bums on Seats, says. “We are not out of the woods yet and there could be some massive shocks and changes still to come, so if you’re not prepared with a strong, relevant business plan that has a range of contingency strategies, it could be devastating.”
It’s a point echoed by accountant Brett Dunn, a partner at Brisbane’s Marsh Tincknell Chartered Accountants. “Regardless of whether it’s recessionary times or if times are booming, it’s important to regularly revise your business plan,” Dunn says. “After surviving 2020, now is the perfect time to put a revised business plan in place with some realistic goals, possibly more inclined towards survival and rebuilding. It’s then a matter of using that plan to plot the course ahead.”
What a business plan looks like
A comprehensive business plan should cover 10 key areas of the business and is usually drawn up in a start-up phase. Starting with an executive summary, it should consist of a description of the restaurant, its products and services, an operating plan, market analysis, strategy and implementation; the management team, a marketing plan, a financial outline, and projections.
The business plan should also define targets and goals, as well as outline the ways the restaurant and its team will keep itself accountable as it grows.
Two of the biggest misconceptions about a business plan, however, are that it needs to be as long as 30 pages in length, and that it’s set in stone and should never change. “A good business plan should be clear, concise and something you know well enough to revise as we don’t live in a static world,” Arash Arabi, author of The Wise Enterprise, says. “A plan is also not sacred, and it needs to be open to change because things change, and so it should continue to evolve.”
Key focus areas
Revising a business plan does not mean scrapping an existing model, Arabi advises. Instead, an effective revision should instead explore the most important lessons from 2020 and decide how they inform the best strategies to take the business forward for 2021. He says the best place to start is with the numbers.
“Look at your figures and learn from what worked and what didn’t work in the past year,” he says. “Really drill down into those figures as that is often where the information that you need is, and that should then inform how you move forward.
“Also ask yourself this—what is it you don’t know and what is it you need to do about that so your business continues to meet the market? Revising the plan is all about being ready for what’s to come.”
The main areas where attention must be paid in the plan should include staffing numbers, wages, the range of services offered and marketing. Knowing the current status in each of these areas, and having strategies in place for any changes, can be the secret to drive the business to continued profit.
Howard Tinker admits the proposed conclusion of JobKeeper at the end of March is of concern for the many restaurants that have been relying on the stimulus payments to stay afloat.
“Sadly, I fear we might see as many as 20 per cent of restaurants close when that’s gone, and we also have to know how to cope with the continuing lack of staff while the people we usually rely on—those on working visas—are not around,” he says.
“So you have to know how to handle your costs as well as how you are effectively marketing to your customer base as things continue to change. If not, you could find yourself getting into trouble.”
Possibly one of the paramount outcomes of revising a business plan over the coming months is remembering to apply one of its most important values—keeping the business owner accountable.
“A fundamental of having such a plan is staying accountable to the range of outlined strategies and goals. It’s also encouraged to include your key staff in the process, which will help them understand your vision and keep you accountable day to day,” Brett Dunn adds.
“We’ve had numerous clients who flourished through the pandemic by altering the way they do business with a number of new revenue streams that would never have been a part of the original business plan. That’s why it’s important for your business plan to be as dynamic as you want to be as a business.”